Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim
Speaker 1: Fox along with my co host Lisa Bramowitz. Each day
Speaker 1: we bring you the most important, noteworthy, and useful interviews
Speaker 1: for you and your money, whether you're at the grocery
Speaker 1: store or the trading floor. Find the Bloomberg p m
Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well,
Speaker 1: the Sinclair Broadcast Group is not very well known, but
Speaker 1: it has one hundreds and seventy three broadcast TV stations,
Speaker 1: mostly in small markets like Sioux City, uh fres No,
Speaker 1: Little Rock, some bigger ones Pittsburgh, Salt Lake City in Washington,
Speaker 1: but they have increasingly taken a rather conservative band, Felix
Speaker 1: to let Bloomberg Business Week Reporter wrote a story about
Speaker 1: this that was truly fastening and Felix, first, can you
Speaker 1: just start with how you came to even write about this? Yeah, Well,
Speaker 1: it's one of those fascinating companies that kind of flies
Speaker 1: under the radar. Um. The way I got interested is
Speaker 1: when they announced their four billion dollar acquisition of Tribune
Speaker 1: Media in May, and I was sitting around with a
Speaker 1: couple of my colleagues and we're like, how come we
Speaker 1: don't know much about Sinclair or who runs that are
Speaker 1: what the culture of the company is like. And for
Speaker 1: a very important and influential media company, UM, they managed
Speaker 1: to really keep their name out of the news as
Speaker 1: much as possible. Tell us about David Smith. He's the
Speaker 1: chairman of the company. Him and his three brothers inherited
Speaker 1: the company from their father, Julian back in the who
Speaker 1: started the company originally in nineteen seventies. And for the
Speaker 1: first you know, a couple of decades of the company,
Speaker 1: it was a really small regional business. And then the
Speaker 1: nineties David Smith really started going out and acquiring other stations,
Speaker 1: and they've been the most aggressive acquirer of broadcast TV
Speaker 1: stations to the point where now they're not only the
Speaker 1: largest station already station group already, but now, uh, you know,
Speaker 1: with the acquisition of a media they're going to be
Speaker 1: by far in a way, the largest broadcaster in the country.
Speaker 1: How did they get around anti trust rules in SEC regulations. Well,
Speaker 1: it's amazing because you know, David Smith uh and his
Speaker 1: brothers are all big supporters of Republican politicians and conservative causes. Uh.
Speaker 1: If Hillary Clinton had won the election, there's no way
Speaker 1: this Tribune Media deal would have gone through the FCC,
Speaker 1: H would not have allowed it. And basically what happened
Speaker 1: is when Trump won his nomination to run the FCC,
Speaker 1: pretty soon after taking over, changed a rule that limited
Speaker 1: ownership of local media companies. And as soon as that
Speaker 1: rule was changed and this arcane rule was re emplaced, UM,
Speaker 1: then that allowed UH Sinclair to buy Tribune Media and
Speaker 1: it's the biggest acquisition the company's history. Felix described for
Speaker 1: people how the television business works when you own a
Speaker 1: station and are an affiliate of a network, and then
Speaker 1: your ability to insert local programming. Yeah, well, you know, basically,
Speaker 1: the station owner UM, even though the branding is from
Speaker 1: the network like ABC, NBC, Fox, CW, the station group
Speaker 1: that owns the station, like Sinclair, has a lot of
Speaker 1: influence and sway over the newsroom, which is really what
Speaker 1: creates the programming. So the local you know, your morning news,
Speaker 1: your evening news, your local nightly news, all of that
Speaker 1: is controlled by a station group that you know, the
Speaker 1: reports of the station group. And so what's amazing about
Speaker 1: Sinclair's They've really pioneered this method of injecting essentially centralized
Speaker 1: conservative political punditry into all of these small stations around
Speaker 1: the country. So does Sinclair have any direct relationship with
Speaker 1: President Trump and some of his cohorts like uh Steve
Speaker 1: Bannon and others. Or is it just sort of a
Speaker 1: tangential relationship based on the ties of the founders of Sinclair. Uh.
Speaker 1: You know, Initially during the start of the two thousand
Speaker 1: and sixteen presidential campaign, they threw their support behind UM
Speaker 1: Ben Carson, who, like David Smith and his brothers UH,
Speaker 1: is from the Baltimore area. UM. But once Ben Carson
Speaker 1: dropped out, they really threw their support behind Trump. They
Speaker 1: did a lot of you know, these centralized news stories
Speaker 1: that's were sent out to the station's criticizing Hillary Clinton. Uh.
Speaker 1: They've broke her to deal with Trump and his campaign
Speaker 1: to get more access for the reporters in exchange for
Speaker 1: not really criticizing uh those interviews at all and running
Speaker 1: them in full. And yeah, they've basically worked pretty hard
Speaker 1: to UM to align themselves with Trump. UM. Most recently
Speaker 1: and probably most importantly, they hired Boris Epstein, who was
Speaker 1: a uh, you know, an aid to the president, one
Speaker 1: of his real surrogates on TV. Throughout the campaign, they
Speaker 1: hired Boers After a brief stint in the White House,
Speaker 1: they hired him to be their chief political analyst and
Speaker 1: he now does you know, three uh segments a week,
Speaker 1: many of which is echo White hot House talking points,
Speaker 1: and each of those segments is then sent out to
Speaker 1: every single newsroom around the country that they're called what
Speaker 1: in the in the terms, they're called must runs and
Speaker 1: even the year. And this creates a lot of tension
Speaker 1: at the stations, particularly in big areas. Um, you know,
Speaker 1: they've had a lot of friction with for instance, Como TV,
Speaker 1: which is the station that they bought in Seattle area.
Speaker 1: It's a very progressive city. It's a liberal viewership. And
Speaker 1: when you talk to the people at these stations, they
Speaker 1: think this is crazy. We're doing our local newscast and
Speaker 1: all of a sudden we have to cut, you know,
Speaker 1: two minutes out of the evening news to go to
Speaker 1: this you know, former Trump spokesperson to do a segment
Speaker 1: about how great Trump is. Of course, it only matters
Speaker 1: if people watch, and real quick are people watch ching
Speaker 1: is listener? Is viewership going up? They have a big
Speaker 1: aggregate audience. I don't think the audiences are going up.
Speaker 1: And typically they don't even really with their stations in
Speaker 1: these markets. They don't really try and have the top
Speaker 1: station ratings wise. Uh, they usually just um, you know,
Speaker 1: buy more stations in the market. Well, it hasn't helped
Speaker 1: the stock stocks up four percent so far this year.
Speaker 1: Thanks very much, Felix Gillette. Great story. I encourage everyone
Speaker 1: to read about the Sinclair Bard Broadcasting Well. I am
Speaker 1: very pleased to welcome Cord Christensen. He is co founder,
Speaker 1: chief executive officer, and chairman of pet i q, the Boise,
Speaker 1: Idaho based company that just distributes pet supplies and adjusted
Speaker 1: it's I p O. It shares her up more than
Speaker 1: four sent on its first day of trading. Cord, congratulations
Speaker 1: on the successful I p O. I wanted just to
Speaker 1: get a sense of from you, first of all, before
Speaker 1: we get into the actual financing, about pet i Q
Speaker 1: and what the business model is and what the growth
Speaker 1: potential is at this point that you see, yes, thank you,
Speaker 1: we uh care a. Pet i Q are very focused
Speaker 1: on one thing, and that is providing better availability of
Speaker 1: the best pet healthcare items and by making those available
Speaker 1: through major retailers across the United States, and the company
Speaker 1: founded day one with that focus. We've never changed that
Speaker 1: focus and ultimately it's a very large market that's growing
Speaker 1: extremely well already. But there's a significant number of pets
Speaker 1: out there in the country that do not get great healthcare,
Speaker 1: and we think because all pets end up buying their
Speaker 1: products through our customers, we have the best opportunity to
Speaker 1: help educate consumers, bring in those those consumers that are
Speaker 1: not providing that, and ultimately grow the market significantly for
Speaker 1: all people that participate in it. We think it's great
Speaker 1: for our supplier partners, for the company as shareholders, unnultimately
Speaker 1: for consumers and their pet owners. Is is this gonna
Speaker 1: be a shot at veterinary offices, because isn't that where
Speaker 1: most people are most medication for pets is currently purchased. Yeah,
Speaker 1: we sure hope not. We built the company hoping that
Speaker 1: we would grow the total market and help everybody be
Speaker 1: successful in it, and we've seen we've been in business
Speaker 1: now since two thousand and nine, and as a company
Speaker 1: as we've grown there definitely was early days. I think
Speaker 1: some people that had the fear of the unknown and
Speaker 1: definitely thought that could be the case. But what we've
Speaker 1: seen is the market's growing and we're definitely seeing those
Speaker 1: new pets coming into it, and the veterinarians have grown
Speaker 1: both the visits and the product business that they have
Speaker 1: in their clinics every single year we've been in business,
Speaker 1: and we hope to continue to drive this success in
Speaker 1: the veterinarian's office. We view them absolutely the critical part
Speaker 1: of the partnership here at pet i Q and want
Speaker 1: to support at them enory and every way we can. Okay,
Speaker 1: I got that. But you know you've got three main
Speaker 1: categories of business, right, I mean you've got the prescription medication,
Speaker 1: You've got the over counter medication, and then the health
Speaker 1: and wellness products. Correct, That is correct? Okay, So I'm
Speaker 1: looking at, let's say, the prescription medication. I mean, I
Speaker 1: got to think that if it's less expensive at you know,
Speaker 1: Walmart or pet Smarter or Kroger or whatever, that that's
Speaker 1: where people are going to go, as opposed to just saying, okay,
Speaker 1: give me whatever you prescribed and I'll pay for it. Yeah.
Speaker 1: I think that definitely could be the first perception. There's
Speaker 1: definitely going to be some people that say they're going
Speaker 1: to go there and buy their pet prescriptions where they
Speaker 1: buy their human prescriptions. But there's been access to pet
Speaker 1: prescriptions outside of the veterinarian market for a very long time.
Speaker 1: You have great companies like One Pet Meds that have
Speaker 1: been selling in that manner for a very long time
Speaker 1: with with pricing that's been very very established to be
Speaker 1: a saving So we think we can peacefully coexist. We
Speaker 1: think we can drive a lot more people into the
Speaker 1: space and and ultimately the veterinarians will gets the first meeting,
Speaker 1: they get the opportunity to be with the patient first,
Speaker 1: and that patient has the opportunity to buy their products there.
Speaker 1: So more times than not they'll choose to buy at
Speaker 1: the veterinarian But there will be those that want to
Speaker 1: come and get their pet prescriptions and they're over the
Speaker 1: counter medications to our customers, and we view it as
Speaker 1: a very creative opportunity for everybody that's in the industry. Court.
Speaker 1: You know, we had a guest on a couple of
Speaker 1: weeks ago who is saying that there have been studies
Speaker 1: done that show that people love their pets more than
Speaker 1: their children. Uh. You know, I have to wonder, just
Speaker 1: in light of the increasing love and emphasis on pets,
Speaker 1: whether the entire amount of spending that people uh have
Speaker 1: every year on their pet healthcare, whether that's rising at
Speaker 1: an exponential price. Can you can you give us a
Speaker 1: sense of that? Yeah? I think um I mentioned it
Speaker 1: a number of times throughout my career, but it's been
Speaker 1: really interesting. For two years on a row now there's
Speaker 1: been more pets brought home to US households than actually babies.
Speaker 1: And so if you just think of the trend as
Speaker 1: that continues to compound, as those pets year over year
Speaker 1: do that we're going to see. Well, I'm just like
Speaker 1: trying to comprehend that the past two years there have
Speaker 1: been more pets brought home than babies in the US
Speaker 1: for the first time in our history of our country.
Speaker 1: Two years in a row. Oh my gosh, Okay, quite
Speaker 1: sorry now, And so I think it's it's very obvious
Speaker 1: that with all the new you know, really pet parents.
Speaker 1: I think we can truly call them pet parents at
Speaker 1: this point when you start seeing those kind of trends
Speaker 1: and those kind of things going on our country. We
Speaker 1: have a customer base that ultimately has a dent of
Speaker 1: the pets in this country go to major retail outlets
Speaker 1: and online stores to find their pet supplies. We're at
Speaker 1: the front and in the very very beginning helping educate
Speaker 1: them on where they can get quality healthcare. And then remember,
Speaker 1: every single person that's going to come back and buy
Speaker 1: a prescription drug at a retailer first is going to
Speaker 1: go to a veterinarian's office and have that visit. And
Speaker 1: so again, we think we're very balanced in providing incremental
Speaker 1: growth for the manufacturers in that space, for the veterinarians,
Speaker 1: and ultimately just exp banning the pie and if there's
Speaker 1: more pets coming home than babies, we're in a very
Speaker 1: good tailwind as far as the market and the market
Speaker 1: that's already growing at a six percent KR. Who knows
Speaker 1: what the potential growth rate could be as we continue
Speaker 1: to drive that awareness. I think the estimate is for
Speaker 1: what about a nine billion dollar market that was in
Speaker 1: the SEC filing, a nine billion dollar market in for
Speaker 1: pet medications. Thanks very much for joining us. Cord Christensen
Speaker 1: is the co founder and the chief executive of pet
Speaker 1: i q UH. Their stock begins trading. It is trading
Speaker 1: right now on the New York Stock Exchange. Thanks very
Speaker 1: much for being with us. And just a note, uh,
Speaker 1: Lisa Bramwitz. You know one of the things that you
Speaker 1: mentioned having to do with the number of pets and
Speaker 1: so on. As part of their uh filing, they say
Speaker 1: about seventy of dog owners and seventy seven percent of
Speaker 1: cat owners view their pets as members of the family. Wow, well,
Speaker 1: those shares are trading on the NASDAC for I beg
Speaker 1: your pardon, Yes, yes, but yeah, it's just amazing. All right. Well,
Speaker 1: let's let's take a look at another story that caught
Speaker 1: our eye today. Y'alman owner and it is the author
Speaker 1: of it. He's a senior writer in banking and finance
Speaker 1: for Bloomberg News. And it was taken a look at
Speaker 1: the pretty incredible profits that we have seen at the
Speaker 1: biggest US banks despite these regulations that have sensibly been
Speaker 1: holding them back. Yellman, can you just give us a
Speaker 1: sense of how big these profits have been. Um, they're
Speaker 1: almost as big as they were in two thousand seven,
Speaker 1: which is pretty amazing because that was a good year
Speaker 1: before everything fell apart, as you remember, and it was
Speaker 1: less regulated. This is the crucial point, right because a
Speaker 1: lot of these Dodd Frank regulations had not yet been implemented.
Speaker 1: It was pretty much unregulated. You can say, I mean
Speaker 1: they they you know, um, they tried there were people
Speaker 1: who tried to regulate it. There with this market, they
Speaker 1: were told to be hands off. Um. Capital rules were revised,
Speaker 1: so basically banks could go on without any capital, meaning
Speaker 1: you don't really need that, could you just borrow as
Speaker 1: much as you can so um, So their leverage ratios
Speaker 1: reached you know, one to fifty at times. UM. So
Speaker 1: there was hardly in the regulation and they were they
Speaker 1: were making a lot of money and now there's all
Speaker 1: this regulation they're constantly complaining about and they're making about
Speaker 1: the same amount of money. So what does that tell
Speaker 1: you about their desire to have the chains of regulatory
Speaker 1: authority loosened? So I mean we have to so no
Speaker 1: put it in context, you know, as as the banker
Speaker 1: um that the bank lobbyist told me who's quoted in
Speaker 1: this story. Well, okay, but the GDP nominal terms is
Speaker 1: bigger than it was, so the number is not one
Speaker 1: to one comparison. We're basically got back to the records,
Speaker 1: but it's a bigger GDP. Typically, what happens with banks
Speaker 1: they're lending an activity goes up as GDP goes up nominally.
Speaker 1: So if GDP grows two percent nominally regardless of realists,
Speaker 1: real terms, everything in the bank's assets due too, but
Speaker 1: they haven't. So in a way, we're not where we
Speaker 1: were in two thousand seven, but we're getting very close.
Speaker 1: So we've heard a lot about how certain businesses have
Speaker 1: become less profitable, talking about debt trading in particular some
Speaker 1: of their prop trading books, as well as equity trading,
Speaker 1: which has been losing it's sort of revenue abilities for
Speaker 1: a while. So what's behind the growth in profits? Um? Well,
Speaker 1: I mean they have been lending on like so unlike,
Speaker 1: unlike the common misperception that they have been lending more
Speaker 1: and more. I mean, again you make comparisons to before
Speaker 1: the crisis, lending was growing faster, but then a lot
Speaker 1: of people will say, god, it was growing too fast, right,
Speaker 1: there were all the subprime stuff that everybody was borrowing.
Speaker 1: But but lending is not all the same, right. I mean,
Speaker 1: when you talk about lending and we're talking about revolving
Speaker 1: lines of credit and straight corporate loans or are these
Speaker 1: more complicated structures that could potentially have some serious problems
Speaker 1: that have sort of embedded leverage. I mean, are we
Speaker 1: talking about just the banks doing their function as basically
Speaker 1: going out there and providing capital to businesses of all
Speaker 1: sizes and letting them go out and create American dream.
Speaker 1: They are doing their function, the lending that's helped, and
Speaker 1: it's And this is interesting because although this is this
Speaker 1: is something we thought about, what didn't really including in
Speaker 1: the story. Um the spreads, I mean, the correct credit.
Speaker 1: The interest rates are so low, so to be able
Speaker 1: to actually make decent profits in an in such a
Speaker 1: horrible interest rate environment is pretty amazing too. But the
Speaker 1: if you look at net interest margin compared it with
Speaker 1: now and and pre crisis, the gap isn't that bad.
Speaker 1: So despite interest rates being so low, banks have managed
Speaker 1: to keep improved. Recently, they came down because nobody was
Speaker 1: borrowing for so for several years. Two thousand ten was
Speaker 1: really bottom. The interesting margins really went down because when
Speaker 1: there's no loan demand, you can't charge for it. You know,
Speaker 1: it doesn't want to what interest people. If there are
Speaker 1: people are in borrowing, you have to keep it low.
Speaker 1: But now there's demands more and more, the demand has
Speaker 1: picked up. People are borrowing, companies are borrowing, and the
Speaker 1: banks are now notching up that interest rate and they
Speaker 1: are able to make the spread that they used to
Speaker 1: make before the crisis, which is very healthy. So and
Speaker 1: trading has has bombed up to I mean this this
Speaker 1: quarter was not a great quarter. Clearly its second quarter.
Speaker 1: Everything went down because because everything is quiet. We don't
Speaker 1: like quiet. We want a lot of scare fear, Brexit
Speaker 1: and and and World War three. Now we don't want that.
Speaker 1: But but you know, trading force for several quarters really improved.
Speaker 1: I mean for some banks, five quarters in a row,
Speaker 1: they saw massive increases in trading. Morgan Salon was doing great. Um.
Speaker 1: You know, JP Morgan has just been grabbing market share. UM.
Speaker 1: US banks are doing great. European banks not so. But
Speaker 1: that helps the US banks. Yeah, I mean I wonder
Speaker 1: if you could just briefly just describe the banks paying
Speaker 1: out interest Let's say on CDs that you're not gonna
Speaker 1: get anything on in a CD. Right, we're talking maybe
Speaker 1: one percent at the current rate, not even one, not
Speaker 1: even one. Now. I mean I was looking at interest
Speaker 1: rates the banks paid the other day, and a chart, um,
Speaker 1: and what happened to them? U um, and there was
Speaker 1: a study. UM, I forget maybe fed or something over there,
Speaker 1: I see, But interest rates they pay their depositors is
Speaker 1: around zero. So that has been and it hasn't picked
Speaker 1: up even as the FED has picked up in its
Speaker 1: interest rate, right, So it's not even connected. That's because
Speaker 1: there's still no alternative. I mean, I talked about lending.
Speaker 1: When there's demand for borrowing, you can jack that up.
Speaker 1: But deposits, you need to jack up the deposit rate
Speaker 1: when you're competing with others. That is not there because
Speaker 1: money markets are no longer in the game, so they
Speaker 1: don't have to. They don't feel like they have dejected out.
Speaker 1: No pressure for that, No pressure, Thanks very much. Yeah,
Speaker 1: I'm an owner on as always senior writer banking and finance.
Speaker 1: Checkout history at Bloomberg dot com. Well, you know, the
Speaker 1: Trump administration as well as Bill Schuster, he is a
Speaker 1: congressman from Pennsylvania, are promoting the idea of turning the
Speaker 1: air traffic control system into a government well a government
Speaker 1: authorized private corporation that would be responsible for the air
Speaker 1: traffic control system in the United States. And here to
Speaker 1: tell us more about this topic on the airline industry
Speaker 1: is an expert Bob Crandall. He is the former chief
Speaker 1: executive of American Airlines and uh, I want to thank
Speaker 1: you very much. For joining us. R Crandel, thanks for
Speaker 1: being I'm glad to be here, all right. So, you know,
Speaker 1: I was going to give them your long history. You know,
Speaker 1: you worked at t w A, you were you know,
Speaker 1: American Airlines and so on. I wonder if you could
Speaker 1: just start off by framing the conversation about the government's
Speaker 1: participation in the airline industry, because we used to have
Speaker 1: a regulated airline industry and now we don't. Sort of, well,
Speaker 1: that's right. Then, we used to have regulated industry in
Speaker 1: the sense that the the c A B control where
Speaker 1: airlines could fly and how much they could charge. All
Speaker 1: that went away in uh. The f a A then
Speaker 1: has the task of establishing safety standards and at the
Speaker 1: same time as the task of physically operating the air
Speaker 1: traffic control system. And what this whole thing is about
Speaker 1: is that around the world more than fifty countries, almost
Speaker 1: every other advanced country, in particularly Canada just one north,
Speaker 1: have taken the actual opera ration of the system out
Speaker 1: of government and they have put it into what are
Speaker 1: called a nsps and navigation service providers, which support themselves
Speaker 1: by charging fees rather than supporting it with taxes as
Speaker 1: the United States does. It has proven to be a very,
Speaker 1: very beneficial change. Those systems are cheaper and they and
Speaker 1: most importantly, I think tim they make better use of
Speaker 1: the airspace, which is a limited asset. So this is
Speaker 1: something that has been under discussion in the United States
Speaker 1: since Bill Clinton's time. Al Gore was the first advocate
Speaker 1: of it, and in the meantime, virtually every other country
Speaker 1: has done it, and I hope we will soon get
Speaker 1: on and do it. All Right, So if we were
Speaker 1: to do that, the board that would oversee this new corporation,
Speaker 1: those members would be selected by the airlines. Correct, No, no, no, no, no, no, no,
Speaker 1: they wouldn't. In fact, uh, general aviation would have a seat,
Speaker 1: Airports would have a seat. Uh, the government would have that.
Speaker 1: The government would have a seat that the Controllers Union
Speaker 1: would have a seat. The in the board overall, there's
Speaker 1: only one of the only one seat is it would
Speaker 1: be the passenger airlliances, one for cargo airlines. There's one
Speaker 1: for charter Would they all have to be part of
Speaker 1: Airlines for America. That's the sort of umbrella group, right, No, no,
Speaker 1: the umbrella group is only the passenger airlines to him,
Speaker 1: So the Airlines for America and the airlines themselves was uh,
Speaker 1: get one seat on this board and everybody else gets
Speaker 1: the seat as well, which is which is I think
Speaker 1: perfectly appropriate. Look, the airlines, because they operate most of
Speaker 1: the airplanes and most of all big airplanes, will pay
Speaker 1: most of the seeds. But the system will be dramatically
Speaker 1: more efficient, and the consequences that the airlines are willing
Speaker 1: to take on the task of things. He's because they
Speaker 1: will be able to operate more lanes to more places
Speaker 1: with fewer delays. So with this potentially new system for
Speaker 1: air traffic control, do you believe that the actual service
Speaker 1: of passenger air aircraft will will improve? Oh? Absolutely, Now
Speaker 1: not Look, we're not talking about on board service, no, no,
Speaker 1: I understand, but just on time start. But we are
Speaker 1: listening of the delays that occurred last year were caused
Speaker 1: by congestion in the in the in the air traffic
Speaker 1: control system. I mean we are still using technologies that
Speaker 1: there are World War technology. We use radar, for example,
Speaker 1: instead of GPS to say where planes are. And because
Speaker 1: we don't use GPS to locate every airplane, airplanes have
Speaker 1: to remain on the equivalent think of a series of
Speaker 1: highways in the sky. And the airplane. Airplanes have to
Speaker 1: fly down those highways to designated endpoints rather than rather
Speaker 1: than keeping track of where every airplane is all the time,
Speaker 1: which is both way more efficient and at the same
Speaker 1: time safer. So the consequences if you could use all
Speaker 1: of the air space in an optimal sort of way,
Speaker 1: there would be fewer delays, and you could have more flights,
Speaker 1: and they could go to more places more often. It's
Speaker 1: and and the real big impact of this PIM is
Speaker 1: that this is going to have a dramatically beneficial impact
Speaker 1: on the US economy. As you know, traveling tourism is
Speaker 1: a big employer. If if airplanes can fly more more
Speaker 1: flights and they if they can incur fewer delays, more
Speaker 1: people are going to travel, More people are gonna stay
Speaker 1: in hotels, eating restaurants, etcetera, etcetera, etcetera. So I think
Speaker 1: this is going to be a big stimulant to the
Speaker 1: to the U. S economy. And again it's something we
Speaker 1: ought to get on with and get done. All right, So, Bob,
Speaker 1: I want you to turn your attention now to what
Speaker 1: goes on in the plane as far as customer service
Speaker 1: is concerned, and also the what goes on in the airports.
Speaker 1: For that, You've obviously seen many of the recent stories
Speaker 1: and watched maybe perhaps the videos of the treatment of
Speaker 1: various passengers. What goes through your mind when you see
Speaker 1: that and you hear these stories? Where where are the
Speaker 1: people in charge of the actual airlines? Why they're not
Speaker 1: walking around like someone would walk around in office and
Speaker 1: see how things are doing well? Keam You know, Look,
Speaker 1: I I spent a long time in the industry and
Speaker 1: at one company that I was particularly fond of, And
Speaker 1: the reality is, when I see stories like that, I'm outraged.
Speaker 1: Obviously they should not happen because you were I know
Speaker 1: that you were famous for Actually you would walk through
Speaker 1: terminals and you would take the actual planes on a
Speaker 1: regular basis, and you would make comments, and you would
Speaker 1: talk to actual passengers. Yes, absolutely, and I talked to
Speaker 1: spend a lot of time talking to employees. And in fact,
Speaker 1: I think if if more of the people who run
Speaker 1: the airlines they did more of that, I think there
Speaker 1: would be fewer of those awful incidents. But let me
Speaker 1: let me say this by way of mitigation and explanation,
Speaker 1: I guess what we've got today is an overcrowded system.
Speaker 1: Our airports are out of date. Our air traffic control
Speaker 1: system is out of date, which we've been talking about
Speaker 1: the consequences. As demand grows, the airports get more and
Speaker 1: more crowded, the airplanes get more and more crowded, and
Speaker 1: all that crowding and confusion is very unpleasant. Now the problem,
Speaker 1: here's the problem. We used to have less crowding and
Speaker 1: less confusion, and we used to have more regulation. And
Speaker 1: as deregulation has occurred, people that the traveling public generally
Speaker 1: has said, look, I am going to select the cheapest flight.
Speaker 1: That is generally what I'm going to choose. That's the
Speaker 1: way I'm going to choose. And the consequence of that
Speaker 1: is that the amount of money available to accommodate passengers
Speaker 1: in a in a non crowded environment, in a more
Speaker 1: pleasant way is very limited. So I I look, I'm
Speaker 1: not happy with the state of the hill and service
Speaker 1: industry service and I don't think people in the industry
Speaker 1: are either. On the other hand, if you look at
Speaker 1: the number of people carried and the tremendous safety of
Speaker 1: the organization, I think you say, well, they're not doing
Speaker 1: as well as i'd like them to do in terms
Speaker 1: of service, but they're doing a pretty down good job
Speaker 1: of keeping people safe. Well. Thanks very much for giving
Speaker 1: us a good picture of the airline industry. Bob Crandall
Speaker 1: is the former chief executive of American Airlines. Thanks for
Speaker 1: listening to the Bloomberg P and L podcast. You can
Speaker 1: subscribe and listen to interviews at Apple Podcasts, SoundCloud, or
Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm on
Speaker 1: Twitter at pim Fox. I'm on Twitter at Lisa abramowits
Speaker 1: one before the podcast. You can always catch us worldwide
Speaker 1: on Brook Radio. H